Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


CMS Begins Process of Implementing Drug Inflation Rebate

Several of the Inflation Reduction Act’s drug pricing provisions went into effect last week, including a measure that will require pharmaceutical manufacturers to rebate the Medicare program if the price of a product rises faster than the rate of inflation. The one-year period that the Centers for Medicare and Medicaid Services (CMS) will use to determine the annual manufacturer price for every unit of a drug sold in Medicare Part D began on October 1. After that year-long period, a product’s annual manufacturer price will then be compared to a benchmark price from the prior year. A similar rebate program for Medicare Part B will go into effect at the beginning of 2023. The Inflation Reduction Act also included a provision to increase the Average Sales Price add-on percentage for biosimilars, which went into effect last week.

CMS Plans Implementation of Medicare Drug Price Negotiation Program

CMS is aiming to hire 95 full time employees to implement its new drug price negotiation authorities, according to a new report from STAT+. CMS expects to hire individuals with a range of experience in pharmaceuticals, economics, data analytics, regulatory analytics, and management. The hiring process is being directed by Kristi Martin, a CMS senior adviser. Martin previously worked as vice president of healthcare at Arnold Ventures. She also served in the Obama administration at the Center for Consumer Information and Insurance Oversight implementing the Affordable Care Act, the Office of Personnel Management on the Multi-State Plan program, and in the U.S. Department of Health and Human Services (HHS) Office of Health Reform working on public health and prevention policy. While the first round of Medicare negotiated drug prices does not take effect until 2026, a list of drugs selected for negotiation must be published by September 1, 2023.

Senate Republicans Introduce Legislation to Undo IRA Drug Pricing Measures

Sens. James Lankford (R-Okla.), Mike Lee (R-Utah), Cynthia Lummis (R-Wyo.), and Marco Rubio (R-Fla.) introduced the Protecting Drug Innovation Act on Friday, which would undo the drug pricing reforms included in the Democrats’ landmark Inflation Reduction Act passed earlier this year. The Republican legislation would repeal the Medicare drug price negotiation program and drug inflation rebate requirements and eliminate the Medicare Part D benefit redesign capping out-of-pocket costs for seniors. The bill’s sponsors have argued that these drug price controls create barriers to effectively bringing down the cost of prescription drugs by reducing innovation and competition.

ACE Kids Act Implemented as of Oct. 1

I mplementation of the Advancing Care for Exceptional (ACE) Kids Act officially began last week. The ACE Kids Act allows children with medically-complex conditions to choose to enroll in a health home – if a state Medicaid program permits – to improve care coordination and health outcomes. The law supports CMS and state Medicaid programs in aligning rules and reimbursement to reduce unnecessary hospitalizations and provide better care coordination for children with complex medical needs. Sen. Chuck Grassley (R-Iowa), the bill’s sponsor, praised CMS for meeting the October 1 deadline for implementing the legislation.

Ben Sasse (R-Neb.) Announces Retirement from Senate

Sen. Ben Sasse (R-Neb.) will retire from the Senate by the end of the year to become the president of the University of Florida. Sasse is expected to step down between mid-November and mid-December. Nebraska Governor Pete Ricketts (R) will choose who will fill his seat in the Senate through 2024. Sasse was first elected to the Senate in 2014. He currently serves on the Finance, Judiciary, Budget, and Intelligence committees.

Burr Criticizes FDA Response to Formula Shortages

Senate Health, Education, Labor, and Pensions Committee Ranking Member Richard Burr (R-N.C.) has written to the Food and Drug Administration (FDA) regarding the agency’s response to the infant formula shortage. The letter condemns FDA’s internal review of the shortages, which the agency published last month. Burr says the review is a demonstration “that the agency does not take accountability seriously.” He argues that before the FDA is provided with additional resources “it needs to show more responsibility and accountability—namely, that the agency can be responsible stewards of the expansive authorities and significant funding Congress has already provided and that it will hold itself accountable for its own mistakes.”

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